1: Ahead of the ninth formal round of Brexit trade talks in Brussels, there is a sense of cautious optimism a deal can still be found. Michel Barnier, while saying the UK's Internal Market Bill is 'unhelpful', has claimed the legislation created an 'opening', a source says.
2: Even after a few turbulent weeks, technical-level negotiations are said to be progressing well. Barnier earlier this week briefed EU27 ministers, saying there is now a 'much more open atmosphere at the negotiating table', another source says.
3: As a result, the public rhetoric from both sides has been dialled down. After talks in Brussels last week, the UK acknowledged there was no threat of a food blockade. The EU has softened its words when it comes to legal action for breaches of the Withdrawal Agreement.
4: Where do we go from here? Barnier has privately said he is 'realistic' a deal can be achieved. A source says: 'An agreement remains possible in line with the EU's interests and the UK's three red lines.' Others say 'landing zones' for potential comprises have been identified.
5: But still big questions over whether a level-playing field, especially for state aid, compromise can be found in a timely fashion. Governance will also be tricky with the EU now more vigilant on enforcement and dispute settlement after the Internal Market Bill.
6: An agreement on fisheries is expected to fall into place eventually. Very few see the issue as a sword worth falling on if a compromise is reached on the level-playing field and governance structures.
7: The next challenge is time. Talks will likely slip into the first two or three days of Nov – beyond the deadlines set by both sides. EU leaders had hoped a draft legal text would have been ready for the EU Council summit on Oct 15 but now just expect a 'deal in principle'.
8: Converting a political agreement into a legal text is a lengthy process, and some here say that's a genuine concern – It's not as simple as handing a few pages out to each negotiator, lots of cross referencing is needed.
9: With this in mind, EU is preparing for a new trading relationship with the UK but hasn't openly publicised 'contingency' measures for a no-deal scenario. Seen as the wrong message to send while Barnier believes a deal is possible. EU doesn't want to be the one to walk away.
10: But that could all change if there is no genuine progress made in the talks next week. This would mostly likely see work on no deal preparations and the dispute over the Internal Market Bill accelerated.
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